employee compensation Archives

Minimum Wage in 2020: Increases by State

by LizStevens | Jan 15, 2020 | Blog

Minimum wage in 2020: increases by state. An overview of the states planning to increase minimum wage rates and recent employment settlements for labor law violations.

Nearly half of the states across the U.S. will increase minimum wage requirements for workers in 2020, according to research by Paycor.

The federal minimum wage for nonexempt workers remains set $7.25, but businesses operating in states with laws requiring a higher amount must pay workers at the higher rate.

Minimum Wage Increases by State in 2020

Here is a list of effective and planned minimum wage increases by state in 2020 as previously identified by Paycor:

State	2019 Minimum Wage	2020 Minimum Wage
Alaska	$9.89	$10.19
Arizona	$11.00	$12.00
Arkansas	$9.25	$10.00
California	$12.00	$13.00 *$13.00 rate is for California employers with 26 or more employees. Employers in California with 25 or fewer employees have a minimum wage of $12.00 per hour.
Colorado	$11.10	$12.00
Connecticut	$11.00	$12.00 effective September 1, 2020
Washington D.C.	$14.00	$15.00 effective July 1, 2020
Florida	$8.46	$8.56
Illinois	$8.25	$9.25
Maine	$11.00	$12.00
Maryland	$10.10	$11.00
Massachusetts	$12.00	$12.75
Michigan	$9.45	$9.65
Minnesota	$9.86	$10.00 *$10.00 rate is for large employers. Small employers have a minimum wage of $8.15 per hour.
Missouri	$8.60	$9.45
Montana	$8.50	$8.65
Nevada	$7.25 rate for Nevada employees who are offered health insurance. $8.25 rate for employees who are not offered health insurance.	$8.00 minimum wage for employees with health insurance and $9.00 minimum wage for employees without health insurance effective July 1, 2020.
New Jersey	$10.00	$11.00
New Mexico	$7.50	$9.00
New York	$11.10	$11.80 *Statewide minimum wages apply in areas that are not governed by a higher, local minimum wage ordinance
Ohio	$8.55	$8.70
South Dakota	$9.10	$9.30
Vermont	$10.78	$10.96
Washington	$12.00	$13.50

See Paycor for a breakdown of minimum wage requirements for each state in 2020.

Minimum Wage Compliance

Whenever there’s a legal change governing wages, worker classifications or paid leave requirements, it’s a good time to review current practices and make the necessary changes to ensure compliance.

Employment settlements for these types of violations are costly. Starbucks recently agreed to pay $176,000 over sick leave violations. Walmart was just ordered to pay $54.6 million to truck drivers who sought back pay for time spent in layover, a mandatory break required by the U.S. Department of Transportation, that Walmart exercised control over. Big Lots Stores will pay $7 million to settle a lawsuit brought by workers alleging a host of violations including unpaid overtime and minimum wages, non-compliant wage statements, wages not timely paid and not paid at termination.

Avoid the costs of noncompliance by monitoring federal, state and local workplace legislation, making changes to policies as needed, and following up with supervisors to ensure the legal precedent for policy changes are well understood.

Can Transparency Close the Pay Gap?

by LizStevens | Oct 29, 2018 | Blog

Can transparency close the pay gap? Transparency can close the gender pay gap, but open discussions about compensation are still taboo in the workplace.

Close to half of employees believe men are paid more than women, particularly in technology and banking and finance, according to recent research conducted by beqom, a cloud-based compensation software provider.

Why? Over a third of employees believe managers set pay based on feelings and opinions about the employee rather than an employee’s performance, experience or skill set.

Pay discussion isn’t as taboo as it once was. Nearly half of employees know how much their colleagues make or have discussed their salary with colleagues. It’s a generational trend as more than half of Millennials share or discuss their salary with colleagues compared to roughly 30 percent of Baby Boomers.

The CEO Pay Gap

There’s another fair compensation concern employees think about, the CEO pay gap. The vast majority of employees believe that most CEOs and top executives of companies today make too much compared to their employees. More than half of workers want to know what their CEO makes. Almost 30 percent of them believe pay transparency creates a better company culture, more than 20 percent believe it would motivate them to work harder and just over 11 percent want to compare their salary to their CEO’s salary.

Employees might want to know coworkers and CEOs salary’s but that doesn’t mean they’re ready to discuss it. Most employees are more comfortable talking about their work performance, career trajectory, or even their happiness or discontent than they are talking about their salaries.

Should Employers Start the Conversation?

More than half of employees don’t plan on asking for a raise or additional benefits at the end of the year, which is especially interesting since almost 30 percent plan to get a new job because they’re dissatisfied with salary and compensation. It might be advantageous for employers to start the conversation and ask employees how they feel about their compensation. If a minimal raise could improve job satisfaction and avoid costly turnovers, it might be worth it.

“Today’s workforce demands pay transparency because they believe it will motivate employees to work harder, create a better company and ultimately solve pay gap disparities among age, gender and race. We must do better to ensure that we’re creating and sustaining a vibrant, motivated and diverse workforce,” says beqom CEO Fabio Ronga.